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Marketing Concepts

Chapter 1
By: Jason Wong
Learning Objectives
Learn the tasks of marketing.
Become familiar with the major concepts
and tools of marketing.
Understand the orientations exhibited by
companies.
Learn how companies and marketers are
responding to new challenges.
What is Marketing
Simple Definition: Marketing is managing
profitable customer relationships.
Goals:
Attract new customers by promising superior
value.
Keep and grow current customers by
delivering satisfaction.


The AMA managerial definition:

Marketing is the process of planning
and executing the conception, pricing,
promotion, and distribution of ideas,
goods, and services to create
exchanges that satisfy individual and
organizational objectives.

Marketing Defined
Kotlers social definition:
Marketing is a societal process by
which individuals and groups obtain
what they need and want through
creating, offering, and freely
exchanging products and services of
value with others.
Core Marketing Concepts
Needs, wants,
demands
Target markets
and market
segmentation
Marketers &
prospects
Product offering and
brand
Value and satisfaction
Exchange and
transactions
Relationship and
networks
Market
This is a Need


Needs - state of felt
deprivation
including physical,
social, and
individual needs.
Maslows Hierarchy of Needs
This is a Want
Wants Needs
become wants
when they are
directed to
specific objects
that might satisfy
the need.
This is Demand

Wants Wants
Buying Power
Demand
Types of needs
Stated needs
Real needs
Unstated needs
Delight needs
Secret needs
Need / Want Fulfillment
Needs and Wants Fulfilled through a
Marketing Offer :
Some combination of products, services,
information, or experiences offered to a
market to satisfy a need or want.




Products
Anything that can be Offered to a Market to Satisfy a Need or Want
Persons Places Organizations
Ideas Information
Services
Activity or Benefit Offered for Sale That is Essentially
Intangible and Does Not Result in the Ownership of Anything
What Satisfies Consumers Needs and Wants?

Experiences Events Properties
Four Levels of Competition

Brand competition
Industry competition
Form competition
Generic competition
Core Marketing Concepts
Target markets & segmentation
Differences in needs, behavior,
demographics or psychographics are
used to identify segments.
The segment served by the firm is
called the target market.
The market offering is customized to
the needs of the target market.
Marketplace, Marketspace,Metamarkets

The Marketplace is physical, as when one
goes for shopping in a store.

Marketspace is digital, as when one goes
shopping on the internet.

Metamarket is described as a cluster of
complementary products and services that
are closely related in the minds of
consumers but are spread across a diverse
set of industries.

Exchange & Transactions
Exchange involves obtaining a desired product
from someone by offering something in return.
Five conditions must be satisfied for exchange
to occur. It is value-creating process.

There must be at least two participants in the
process.
Each party must offer something of value to
the other.
Both parties must want to deal with each other.
Both participants have the right to accept or to
reject the offer.
Both groups must have the ability to
communicate and deliver on the mutual
agreement.
Transaction
Transaction is a trade of values
between two or more parties.

It involves at least two things of
value, agreed-upon conditions, a
time of agreement, and a place of
agreement.

Relationship Marketing
Relationship marketing aims to build
long-term mutually satisfying relations
with key parties, which ultimately
results in marketing network between
the company and its supporting
stakeholders.


Relationship Marketing
Four key constituents for marketing are:
Customer
Marketing Partners ( channel, suppliers,
distributors, dealers and agencies)
Employee
Members of financial community (shareholders,
investors)
The development of strong relationships requires
an understanding of the capabilities and
resources of different groups, as well as their
needs, goals and desires.
Marketing Mix
7 Ps in Services Marketing
3 additional Ps in services marketing
People: Any person coming into contact with
customers can have an impact on overall
satisfaction.
Process: Process(es) involved in providing a
service and the behaviour of people, which
can be crucial to customer satisfaction.
Physical evidence
Matching Mix Concepts (A & S)

4 As 4 Ss
Acceptability Solution
Affordable Sense
Accessible Spread
Awareness Supports

Marketing Channels
Marketing Channels-
To reach Target
market

Communication
channels
Distribution
channels
Service channels

Deliver messages to and
receive messages from
target buyers.
Includes traditional
media, non-verbal
communication, and
store atmospherics.

Marketing Channels
Marketing
Channels

Communication
channels
Distribution
channels
Service channels

Display or
deliver the
physical products
or services to the
buyer / user.
Marketing Channels
Marketing
Channels

Communication
channels
Distribution
channels
Service channels

Carry out
transactions with
potential buyers by
facilitating the
transaction.

Marketing Management Philosophies

Production Concept

Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
Production Concept
Consumers will favour those products
that are widely available and low in cost.

Therefore increase production and cut
down costs.

And build profit through volume.

The Production Concept
A customer can have any colour he likes for
his car so long as it's black

Henry Ford
Product Concept
Consumers will favour those products
that offer the most quality, performance,
or innovative features.
Therefore, improve quality, performance
and features.
This would lead to increased sales and
profits.


Marketing Myopia

Managements failure to recognize a companys
scope of business.

Sellers pay more attention to the specific products
they offer than to the benefits and experiences
produced by the products.

They focus on the wants and lose sight of the
needs.
The Selling Concept
Consumers , if left alone , will not buy
enough of companys products.

Therefore, promote sales aggressively.

And,build profit through quick turnover.

The Marketing Concept
The key to achieving organizational goals
consist in determining the needs and wants
of target markets and delivering the desired
satisfactions more effectively and efficiently
than competitors.
And build profit through customer
satisfaction and loyalty.

Marketing and Sales Concepts Contrasted
The Societal Marketing Concept
The societal marketing concept holds that the
organizations task is to determine the needs,
wants, and interests of target markets and to
deliver the desired satisfactions more
effectively and efficiently than competitors in a
way that preserves or enhances the
consumers and the societys well being.
- It addresses conflicts between consumers
and firms short run wants and long term
welfare.

Societal Marketing Concept
The Holistic Marketing Concept
It is based on the development, design and
implementation of marketing programmes,
processes and activities that recognises
their breadth and interdependencies. Four
components are:
Relationship marketing
Integrated marketing
Internal marketing
Social responsibility marketing

Holistic
Marketing
Integrated
marketing
Relationship
Marketing
Social
Responsibility
Marketing
Internal
Marketing
Marketing
deptt
Senior
Mgt
Other
Deptt
Communications
Products &
Services
Channels
Ethics
Environment
Community
Legal
Customers Partners
Channels
Marketing System
Marketing System
Marketing is concerned with the flow of
goods and services from the points of
production to the points of consumption.
There is a systematic arrangement of
these functions of marketing to move the
goods and services to the needy
persons.

This system is essential to the creation
of time, place and possession utilities.

Marketing System
A dynamic marketing system must be willing
to undertake the following specific activities :
1. Define market area.
2. Research consumer wants and needs.
3. Develop and redevelop product / service.
4. Select, train, motivate and control human
resources.
5. Develop sales approach and advertising
support.
WHAT IS MARKET ?
A market consists of all the potential customers
sharing a particular need or want who might be willing
and able to engage in exchange to satisfy that need or
want.

Potential Market (have sufficient level of interest in a
market offer)

Available Market (who have interest, income and
access to a particular offer)

Target Market or Served Market (a co. can go for
serving whole available market or can concentrate on
certain segments)

Penetrated Market (set of buyers who are buying the
co.s product)

Marketer & Prospect
A marketer is someone seeking a
response (attention, a purchase, a
donation) from another party, called
the prospect.
If two parties are seeking to sell
something to each other, we call both
of them marketers.


How Business and Marketing are Changing/
Marketing themes in the new economy
Changing Technology
Globalization
Customer Empowerment
Customization
Customer relationship marketing
Customer lifetime value
Target marketing
Integrated marketing communication
Channels as partners
Every employee a marketer